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The President has signed the Taxpayer Bill of Rights II and by the time you read this column, we will quite likely have a number of additional important pieces of Federal tax legislation.

The Taxpayer Bill of Rights II contains a laundry list of practice and procedure changes, including the following:

* A $500,000 civil right of action against the U.S. government when a government employee intentionally compromises any tax due from a CPA, attorney, or enrolled agent, in exchange for advice about a client's tax liability.

* The requirement to give 30 days notice before terminating an installment payment agreement with a taxpayer and institution of procedures to review termination of installment agreements.

* Expansion of the IRS's authority to abate interest and the creation of a review procedure when the IRS fails to abate interest.

* Increasing the amount of attorneys' fees when the IRS takes unreasonable litigation positions.

* Shifting the burden of proof in attorneys' fees cases from requiring the taxpayer to prove that the government was unjustified to require the government prove that it was substantially justified.

* Giving a taxpayer who has paid the 100% penalty for failure to pay over trust-fund taxes a "right of contribution" from other persons liable for the nonpayment.

* Generally exempt volunteer members of boards of tax exempt organizations from the 100% penalty.

* Reduce ability of IRS to issue retroactive regulations.

* Permit taxpayers to rely on timely mailed filing rule when using private carriers.

* Require IRS to inform one spouse when it is attempting to collect from the other spouse.

* Permit smaller offers-in-compromise, those for less than $50,000, to be approved without the written approval of the chief counsel.

* A switchover from the IRS ombudsman as the head of problems resolution to a new function called the taxpayers' advocate, who reports directly to the commissioner.

Other pieces of legislation currently headed for passage are a small business tax relief measure intended to offset some of the impact on small business of the increase in the minimum wage. The House version of that bill includes a number of S corporation reforms that make the S corporation a more useful form of doing business. Also, the health-care bill which could include provision for medical savings accounts, the controversial IRA-like savings vehicle intended to introduce more consumer-driven restraint on health-care costs. *

Source: H.R. 2337.

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